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The State of Texas has filed suit against Microsoft Corp, accusing it of undermining an investigation of possible antitrust violations through secrecy clauses in its contracts with computer manufacturers. Texas Attorney General Dan Morales initiated the action Friday, alleging that Microsoft requires all of its business partners to sign a contract requiring them to inform Microsoft before providing any information to state or federal antitrust investigators. Morales asserts that these kind of requirements interfere with the attorney general’s constitutional and statutory responsibilities to conduct unobstructed, confidential investigations. The legal action in Texas comes only a few weeks after the federal government recommended that a Washington judge levy a $1m-a-day fine against the company if it did not stop its practice of including its Internet Explorer browser software with the Windows 95 operating system. The Texas suit seeks a court order to nullify the non-disclosure clauses in Microsoft’s business contracts, and the company has already been asked to voluntarily inform its licensees that they do not have to comply with the provision. Although Microsoft’s marketing practices are being scrutinized in several states and by regulators in Washington, the investigation in Texas is a high- visibility one for the software giant, as that state is the home of both Compaq Computer Corp and Dell Computer Corp. Texas became one of the first states to launch a probe into Microsoft’s activities last February (CI No 3,099). Microsoft played down the significance of the lawsuit, saying that it was the result of miscommunication, and that its standard non-disclosure agreements are not designed to hamper any official investigations. A hearing in the case has been set for November 24.


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